[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 2371 Introduced in Senate (IS)]

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118th CONGRESS
  1st Session
                                S. 2371

To amend the Internal Revenue Code of 1986 to exclude from gross income 
  interest received on certain loans secured by rural or agricultural 
                             real property.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 19, 2023

  Mr. Moran (for himself and Mr. King) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to exclude from gross income 
  interest received on certain loans secured by rural or agricultural 
                             real property.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Access to Credit for our Rural 
Economy Act of 2023'' or as the ``ACRE Act of 2023''.

SEC. 2. EXCLUSION OF INTEREST ON LOANS SECURED BY RURAL OR AGRICULTURAL 
              REAL PROPERTY.

    (a) In General.--Part III of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 is amended by inserting after section 
139I the following new section:

``SEC. 139J. INTEREST ON LOANS SECURED BY RURAL OR AGRICULTURAL REAL 
              PROPERTY.

    ``(a) In General.--Gross income shall not include interest received 
by a qualified lender on any qualified real estate loan.
    ``(b) Qualified Lender.--For purposes of this section, the term 
`qualified lender' means--
            ``(1) any bank or savings association the deposits of which 
        are insured under the Federal Deposit Insurance Act (12 U.S.C. 
        1811 et seq.), and
            ``(2) any entity wholly owned, directly or indirectly, by a 
        company that is treated as a bank holding company for purposes 
        of section 8 of the International Banking Act of 1978 (12 
        U.S.C. 3106) if--
                    ``(A) such entity is organized, incorporated, or 
                established under the laws of the United States or any 
                State of the United States, and
                    ``(B) the principal place of business of such 
                entity is in the United States.
    ``(c) Qualified Real Estate Loan.--For purposes of this section--
            ``(1) In general.--The term `qualified real estate loan' 
        means any loan--
                    ``(A) secured by rural or agricultural real estate 
                or by a leasehold mortgage (with a status as a lien) on 
                rural or agricultural real estate, and
                    ``(B) in the case of any loan with respect to 
                single family residence described in paragraph (2)(B)--
                            ``(i) the proceeds of which are used to 
                        purchase or improve such residence, and
                            ``(ii) the principal of which (when added 
                        to the principal of all other such loans with 
                        respect to such residence) does not (as of the 
                        time the interest income on such loan is 
                        accrued) exceed $750,000.
        For purposes of the preceding sentence, the determination of 
        whether property securing such loan is rural or agricultural 
        real estate shall be made as of the time the interest income on 
        such loan is accrued.
            ``(2) Rural or agricultural real estate.--The term `rural 
        or agricultural real estate' means--
                    ``(A) any real property which is substantially used 
                for the production of one or more agricultural 
                products,
                    ``(B) any single family residence--
                            ``(i) which is the principal residence 
                        (within the meaning of section 121) of its 
                        occupant, and
                            ``(ii) which is located in a rural area 
                        within the meaning of section 1.11(b)(3) of the 
                        Agricultural Credit Act of 1987 (12 U.S.C. 
                        2019(b)(3)), and
                    ``(C) any aquaculture facility.
            ``(3) Aquaculture facility.--The term `aquaculture 
        facility' means any land, structure, or other appurtenance that 
        is used for aquaculture (including any hatchery, rearing pond, 
        raceway, pen, or incubator) that is located in any State.
    ``(d) Coordination With Section 265.--Qualified real estate loans 
shall be treated as obligations described in section 265(a)(2) the 
interest on which is wholly exempt from the taxes imposed by this 
subtitle.''.
    (b) Clerical Amendment.--The table of sections for such part III is 
amended by inserting after the item relating to section 139I the 
following new item:

``Sec. 139J. Interest on loans secured by rural or agricultural real 
                            property.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
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